Banco BPM, which has lagged larger rivals in reducing bad debts but has decided to speed up the process, said the three suitors would be given two or three months to conduct a due diligence on the loans before they had to submit binding bids.

Among the bidders shortlisted is a consortium comprising Italy’s top loan recovery firm doBank, U.S. fund Fortress and SPAXS, a new bank being set up by veteran banker Corrado Passera.

A second consortium is made up by Italian bad loan specialist Credito Fondiario and U.S. fund Elliott while the third suitor comprises U.S. funds Christofferson Robb & Company, Davidson Kempner and domestic servicer Prelios. ($1 = 0.8623 euros) (Reporting by Valentina Za; Editing by Crispian Balmer)